Head-To-Head Analysis: Government Properties Income Trust (GOV) vs. Kennedy-Wilson (KW)

Government Properties Income Trust (NASDAQ: GOV) and Kennedy-Wilson (NYSE:KW) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, dividends, earnings and risk.

Volatility & Risk

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Government Properties Income Trust has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, Kennedy-Wilson has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

Insider and Institutional Ownership

59.3% of Government Properties Income Trust shares are held by institutional investors. Comparatively, 84.6% of Kennedy-Wilson shares are held by institutional investors. 2.7% of Government Properties Income Trust shares are held by company insiders. Comparatively, 17.1% of Kennedy-Wilson shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Government Properties Income Trust and Kennedy-Wilson’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Government Properties Income Trust $316.53 million 3.85 $12.09 million $2.02 6.08
Kennedy-Wilson $810.60 million 3.32 $100.50 million $0.45 39.56

Kennedy-Wilson has higher revenue and earnings than Government Properties Income Trust. Government Properties Income Trust is trading at a lower price-to-earnings ratio than Kennedy-Wilson, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Government Properties Income Trust and Kennedy-Wilson, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Government Properties Income Trust 3 1 2 0 1.83
Kennedy-Wilson 0 1 2 0 2.67

Government Properties Income Trust currently has a consensus target price of $18.33, suggesting a potential upside of 49.29%. Kennedy-Wilson has a consensus target price of $26.00, suggesting a potential upside of 46.07%. Given Government Properties Income Trust’s higher probable upside, equities research analysts clearly believe Government Properties Income Trust is more favorable than Kennedy-Wilson.

Profitability

This table compares Government Properties Income Trust and Kennedy-Wilson’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Government Properties Income Trust 3.82% 1.22% 0.46%
Kennedy-Wilson 12.40% 4.01% 1.08%

Dividends

Government Properties Income Trust pays an annual dividend of $1.72 per share and has a dividend yield of 14.0%. Kennedy-Wilson pays an annual dividend of $0.76 per share and has a dividend yield of 4.3%. Government Properties Income Trust pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kennedy-Wilson pays out 168.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kennedy-Wilson has raised its dividend for 7 consecutive years. Government Properties Income Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Kennedy-Wilson beats Government Properties Income Trust on 11 of the 16 factors compared between the two stocks.

About Government Properties Income Trust

Government Properties Income Trust is a real estate investment trust (REIT). The Company operates through two segments: ownership of properties that are primarily leased to government tenants and its equity method investment in Select Income REIT (SIR). The Company’s properties are located in areas, including Alabama, Arizona, California, Colorado, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey and New Mexico. As of December 31, 2016, the Company owned 73 properties (95 buildings). As of December 31, 2016, the Company’s properties were located in 31 states and the District of Columbia, and contained approximately 11.4 million rentable square feet.

About Kennedy-Wilson

Kennedy-Wilson Holdings, Inc. operates as a real estate investment company. The company owns, operates, and invests in real estate both on its own and through its investment management platform. It focuses on multifamily and commercial properties located in the Western United States, the United Kingdom, Ireland, Spain, Italy, and Japan. The company owns interest in approximately 53.1 million square feet of property, including 27,161 multifamily rental units; and 18.8 million square feet of commercial property. It also provides real estate services primarily to financial services clients. In addition, the company is involved in the development, redevelopment, and entitlement of real estate properties; and management of real estate properties for third parties. Kennedy-Wilson Holdings, Inc. was founded in 1977 and is headquartered in Beverly Hills, California.

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